House not for sale - Can the government force you to sell
your house in the name of new development?
January 6, 2005: 12:30 PM EST
Her son, Matt, and daughter-in-law, Suzanne, live next door with their teenage son, Andrew. Among their most precious possessions: the garden planted by Matt's grandmother, and the kitchen doorway where they've charted Andrew's height over the years.
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Bill Von Winkle bought his first building in the neighborhood 20 years ago, and went to work making sandwiches in the downstairs deli and renovating the upstairs apartments.
Susette Kelo meticulously restored her small pink Victorian house.
So when the New London Economic Development Corporation, a non-profit organization appointed by the city, approached about 70 property owners in Fort Trumbull about selling their homes to make space for a luxury hotel, condominiums and office space, these and a handful of other owners declined.
Their property, they said, is not for sale.
In November 2000, however, the city invoked eminent domain – a government right to seize property for public use – and sent out condemnation notices to owners refusing to sell. The city planned to pay the owners fair market value, take possession of the buildings and tear them down.
According to Daniel Krisch, one of the attorney's representing New London and its economic development arm, the city had several good reasons for razing the well-kept middle class neighborhood to replace it with a new, private development.
Krisch contends that the new development would create jobs, boost tax revenue, improve the city's infrastructure and provide public access to the river. It's for the benefit of the entire community, he said.
Taking for the greater good
The Institute for Justice argues that displacing property owners for private development is not legal. "The Constitution says [eminent domain] should be used for a public use -- a road, a court house, a military base. Not a Wal-Mart," said Scott Bullock, a senior attorney with the institute.
According to a study of court papers and published accounts covering a five-year period, the institute found more than 10,000 examples of property being condemned under eminent domain for the benefit of private parties.
The city of New London and other cities using eminent domain in the interest of urban renewal argue that such private projects are for public use, even if the public only benefits indirectly.
"This is a tool that is important to local governments because it allows them to revitalize areas that otherwise would not get revitalized," said Tom Grundhoefer, general counsel for the League of Minnesota Cities, which is filing a "friend of the court" brief on behalf of New London.
Cities want to attract new businesses and developers to their urban centers rather than contributing to sprawl by building in the suburbs, he said. But they can only do so if they can get existing owners to sell.
"Often times there might be one or two owners who will not go along with the voluntary sales situation," he said. "The question comes up, 'Do you stop the entire project because one or two won't sell, or do you use eminent domain to encourage that activity?'"
Encourage isn't a word that Joy and Carl Gamble of Norwood, Ohio associate with eminent domain.
The retirees are scheduled to be evicted from their home of 35 years in early February to make way for Rookwood Exchange, a $125 million development with offices, shops, housing and restaurants.
In this case, the city of Norwood voted to exercise eminent domain after a study -- which was funded by the developers of Rookwood Exchange -- determined that the Gamble's neighborhood is blighted.
"The easy story is to wrap the Gambles in the American flag and say, 'It's not right,'" said Richard Tranter, an attorney representing Rookwood Partners, adding that it's not unusual for cities to ask developers to pay for studies and other expenses related to development. "But it's not that easy."
Norwood is a doughnut hole in the middle of Cincinnati that is about to declare a fiscal emergency, according to Tranter. What's more, the Gamble's neighborhood is cut off from the rest of the city by a major freeway and roads feeding into that freeway.
"With the exception of the Gambles, every resident is saying they want to get out of the neighborhood," he said. "An 80-year old blind widow called it a blessing."
Tranter says the developer has signed contracts with 65 residents to buy their property for no less than 25 percent above market value, pending the outcome of the Gamble's appeal.
Still, the Gambles don't want to sell for any price.
"We're very proud of this house. It's extremely well built," said Joy.
"We raised our children here. All of our memories are here,"
she said. "We don't want to move, especially for a shopping mall."
The Norwood, Ohio Eminent Domain Trial
Eminent domain trials are one of the biggest litigation challenges we face at the Institute for Justice. Eminent domain cases always go to trial and the judge inevitably puts them on a very fast track. This means we must rally enormous amounts of energy and resources in a very short period of time (always against adversaries with virtually unlimited resources) if our clients are to have any hope of defeating the powerful interests on the other side.
Nowhere was this more evident than in our weeklong eminent domain trial in Cincinnati, Ohio, that took place in April. The case concerns a challenge to another bogus “blight” designation of a perfectly fine middle-class neighborhood of homes and small, locally owned businesses. In this case, developer Jeffrey Anderson, who has $500,000,000 in assets, wishes to expand two shopping plazas that he already owns by building “Rookwood Exchange,” a complex of private office buildings, high-end apartments and chain stores in Norwood (a suburb of Cincinnati). A group of home and business owners refused to sign contracts with Anderson; they instead simply wanted to keep what was rightfully theirs.
Unable to obtain the properties voluntarily, Anderson asked Norwood’s City Council to pursue an urban renewal study of the area to see if the neighborhood was “blighted.” Anderson demanded and paid for the study and, on the basis of this work, the City absurdly declared that the neighborhood was “blighted/deteriorated” and “deteriorating.”
Of course, the blight designation was a fraud. The study admitted that none of the homes was dilapidated or delinquent on taxes. And the supposed problems with the neighborhood, such as the design of the streets and the increased traffic from the near-by developments, were created either by the City or Anderson’s other projects.
Everyone knows why the study was done: in Ohio, you need an urban renewal plan in order to condemn property for redevelopment. Adding to the charade, Anderson agreed to reimburse the City for the costs of acquiring the property and agreed to pay the City’s legal fees if the eminent domain case went to trial. Thus, the City rented out its eminent domain authority—one of the most awesome powers government has at its disposal—to a private party. Call it government by the highest bidder. The Institute for Justice was determined to stop this outrageous abuse of eminent domain.
Given the nature and complexity of the case, it should not have gone to trial for probably almost a year. However, because of Ohio’s unfair eminent domain laws—that put on a fast-track cases where someone dares to challenge the use of eminent domain—we were given a little more than four months to prepare our case.
Even though we were on a lightning-fast schedule, we did what we at IJ always do: everyone pulled together as a team to ensure that we had what it took to present the most persuasive, compelling case possible.
Not only did we pull together at IJ, but our clients and supporters did the same thing on the ground in Cincinnati. They held a rally on the first day of the trial. As we walked to the courthouse that day, we wondered how many people could possibly turn up on an unseasonably cold day at the start of a workweek. What a tremendous sight it was to see a large group of people standing on the courthouse steps—an American flag waving, anti-eminent domain banners held high. They all applauded as we approached and I grabbed the bullhorn to thank them for being there and for the support they had shown the property owners and us throughout this case.
The courtroom that day was so packed that the bailiff had to demand that dozens of people wait out in the hall. Three cameras lined the back of the room. This was it.
We started off with a high-risk strategy but one that we thought was important and necessary for properly setting up the case. We began our presentation with witnesses that we called from the City and the developers. We knew they were going to be hostile and uncooperative, and I was, frankly, a bit nervous about beginning with them. Then I remembered right before I was about to begin my questioning that this was one of the great things about being a lawyer at IJ and one of the reasons why I went to law school: to confront enemies of freedom head-on. Not just to talk about protecting individual liberty, but to hold people who would violate others’ rights accountable for their actions in court. The strategy paid off. We got the evidence we wanted from the reluctant witnesses, including the fact that it was the developer, not the City, that first proposed doing an urban renewal study for the area.
My co-counsel, Dana Berliner, did an incredible job in a very short period of time preparing for the expert witnesses in the case—the City’s and ours. Contrasting with the angry tone and style of the Norwood city attorney, Dana asked penetrating, often devastating, questions of witnesses in a soft, polite voice. And when one of the City’s witnesses was less than forthcoming, Dana would pause, and you could almost see the gears in her razor-sharp mind turning as the witness anxiously waited for the follow-up question that would inevitably pin him or her down.
Trials are exhausting, exhilarating experiences that always involve unexpected turns and challenges. This trial was no exception. When the City made a foolish (and ultimately rejected) motion to exclude one of our expert witnesses, staff attorney Bert Gall stayed up all night in our headquarters in Washington, D.C., to write a brief that tore apart the City’s claim. Our paralegal Gabriel Hudson was so exhausted after days and nights of preparing thousands of pages of documents for the trial, he literally fell asleep while ironing his shirt for the next day. (Thankfully, no serious injury occurred!)
Perhaps the emotional highpoint of the trial came when our client Joy Gamble took the stand. She and her husband Carl are now retired and have lived in the same house in this neighborhood for 35 years. Mrs. Gamble is a sweet, caring woman who simply does not deserve the treatment that she has received from her city government and the developers who are after her property. On a personal note, she reminds me of my own grandmother, who passed away just a few years ago, and it was difficult to ask her questions on the stand about the City’s efforts to throw her out of her home. At the end of her testimony, I asked her why she wanted to keep her home and this is what she said: “All of our memories are there. We’re rooted there. We do not want to be uprooted. We want to stay right here until we’re carried out feet first.” I don’t think there was a dry eye in the courtroom. And when the attorney for the City, who had just gone after several of the other property owners with accusatory questions, rose to cross-examine Mrs. Gamble, he must have felt the collective vibe in the room that implied, “Don’t you dare go after her.” He paused before he walked toward the podium, then said, “No questions,” and sat back down in his chair.
In our property rights cases, the Institute for Justice fights not only for legal principles and to establish the proper boundaries for eminent domain, we also fight to protect the Carl and Joy Gambles of the world. What Norwood is doing to this couple—and what so many other governments do to their citizens through eminent domain abuse—is immoral, and it must be stopped. The Norwood trial demonstrated the lengths to which governments will bend the law and abuse their powers in order to seize property for private development. It also demonstrated to everyone in the courtroom the human cost of the government’s shameful actions. We hope our work at IJ will ultimately show that so long as there are homeowners and businesspeople willing to stand up and fight for their rights, the scourge of eminent domain abuse will be eliminated.
Scott Bullock is an IJ senior attorney.
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